The Economic Survey 2023-2024 was presented to the Lok Sabha by Union Finance Minister Nirmala Sitharaman. The survey indicated that India's real GDP is anticipated to increase by 6.5 to 7% in 2024-25.

The following are some of the notable initiatives in the Economic Survey:

The Indian labour market has shown significant improvement over the past six years, with the unemployment rate declining to 3.2% in 2022-23. This positive trend is accompanied by rising youth and female participation in the workforce, offering an opportunity to harness the demographic and gender dividend. Notably, the net payroll additions under the Employees' Provident Fund Organisation (EPFO) have more than doubled in the past five years, indicating healthy growth in formal employment.

Balancing Technology and Labour

As artificial intelligence (AI) and other advanced technologies become integral to various economic activities, it is crucial to steer technological choices towards collective welfare. Employers must strike a balance between deploying technology and utilizing human labour to ensure sustainable growth and quality employment. The focus should be on sectors like agro-processing and the care economy, which hold promise for generating and sustaining quality jobs.

Government Initiatives and Skill Development

The Government of India has implemented several measures to boost employment, foster self-employment, and promote worker welfare. The increase in candidates undergoing skill development through flagship programs underlines the commitment to 'Skill India.' Addressing regulatory chokeholds, such as those related to land use and building codes, and expanding sectors and hours open to women’s employment, can further enhance employment generation and increase women's labour force participation.

Services Sector: Fueling Growth Opportunities

The services sector continues to be a significant contributor to India's economic growth, accounting for about 55% of the total economy in FY24. With an estimated growth of 7.6% in FY24, the sector remains robust. The services Purchasing Managers’ Index (PMI) has consistently stayed above 50 since August 2021, indicating continuous expansion. In March 2024, the PMI reached 61.2, marking a substantial expansion in sales and business activity.

India’s services exports accounted for 4.4% of the world's commercial services exports in 2022, maintaining steady momentum post-pandemic and constituting 44% of India’s total exports in FY24. The outstanding services sector credit reached ₹45.9 lakh crore in March 2024, with a YoY growth of 22.9%.

Transportation and Tourism Growth

Passenger traffic in Indian Railways increased by about 5.2% in FY24, with revenue-earning freight witnessing a 5.3% increase. The aviation sector also saw substantial growth, with a 15% YoY increase in total air passengers handled at Indian airports in FY24. The tourism sector is expanding significantly, with India's share of foreign exchange earnings in world tourism receipts increasing from 1.38% in 2021 to 1.58% in 2022.

Technological Advancements and Job Demands

India's services landscape is being reshaped by rapid technology-driven transformations in domestic service delivery and diversification of services exports. Emerging job demands in the sector necessitate focused skills in areas such as AI, Machine Learning, Internet of Things, Cybersecurity, Cloud Computing, Big Data Analytics, Augmented Reality, Virtual Reality, 3D Printing, and Web and Mobile Development.

Potential Challenges and Opportunities

A report by Capital Economics suggests that AI might moderate India’s services export growth, potentially reducing it by 0.3-0.4 percentage points annually over the next decade. This highlights the importance of the relatively less skill-dependent tourism sector for employment generation. Public policy should focus on enhancing the tourism sector while upskilling the workforce through government and industry collaboration to enable India to become a high-value partner in specialized areas like cybersecurity and enterprise management.

In conclusion, India's employment and skill development landscape is evolving positively. By leveraging technological advancements, addressing regulatory barriers, and focusing on emerging sectors, India can ensure sustainable growth and quality employment opportunities for its workforce.

Source: Economic Survey

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